Top Ten Problems Solved by SAP Business One in Wholesale
Problem #3: Slow Picking, Packing and Shipping. How SAP Business One Helps Wholesale Businesses.
This is the third in our series of blogs highlighting ten common problems addressed by SAP Business One. In our last blog, we examined problems resulting from manual order processing. In this blog, we highlight problems due to slow picking, packing and shipping.
Slow compared to what?
Slow is a relative term, so we must ask ourselves a question: slow compared to what? After all, slow can be cost-effective. Slow can mean careful and considered. Slow can also mean we are not as good as our competitors; that we do not deliver the level of service customers expect of us. And if that is the case, slow picking, packing, and shipping will create serious financial and operational problems for our business.
Let’s look at the problem in more detail, starting with customer experience.
Poor Customer Experience
Slow, late or missing deliveries erode confidence. Customers lose trust. They switch to faster and more reliable competitors. And they may not come back. If you are subject to a Service Level Agreement, terms may be broken and fines imposed. Slow service puts you at a competitive disadvantage and can damage your brand.
Bottlenecks and Higher Costs
Late delivery into your warehouse creates a domino effect:
- Backlogged orders pile up
- Inbound shipments can’t be put away
- Inventory accuracy declines as items stack or get misplaced
- Overtime costs rise to catch up
Bottlenecks also lead to cost inflation. Labour costs go up as additional time is devoted to resolving issues. Inventory costs go up as more stock is held as contingency or is ordered in a hurry and not at the best price available to you.
Lost Opportunities
Slow picking packing and shipping can be a brake on growth. Inefficiency may prevent you from being able to respond effectively to seasonal demand or sudden spikes due to, say, a successful marketing promotion.
You may consider foregoing opportunities in the knowledge that your operations could not respond quickly enough.
Cash Flow Problems
Cash is king. Wholesale distributors are especially reliant on fast order cycling. Late shipment leads to late invoicing. Late invoicing means cash receipts are delayed. The knock effect can be devastating. Ruinous, in fact.
And it isn’t simply a problem of cash collection. Inefficiency in inventory management can lead to unnecessary amounts of cash being tied up in slow moving stock that is cash sitting on the shelf.
How SAP Business One helps wholesale operations
SAP Business One supports wholesale operations and addresses the problems outlined above by streamlining warehouse operations, improving visibility, and automating manual processes.
Streamline Operations
SAP Business One is a fully integrated system. This means that information flows smoothly from one area to the next without the need for manual intervention. For example:
- Sales orders flow automatically into pick lists
- Credit status, stock availability, and pricing are all validated instantly
- Status and tracking updates ensure timely invoicing of completed orders
This means that there are fewer delays and errors. Deliveries are faster. Customer experience is enhanced.
SAP Business One also streamlines operations, as in the following example:
The solution promotes efficiency by offering various picking methods tailored to different workflows, including wave, batch, zone and others. It can also optimise route and layout planning, ensuring that pickers follow the shortest or most logical path through your warehouse(s).
Improve Visibility
With SAP Business One you have end to end visibility of operations and financial management.
The solution seamlessly integrates with hand-held devices for shop floor data capture and task management. Mobile devices receive real-time updates of tasks and stock availability. Pickers know exactly where to go and what’s available. Management has complete visibility of activities on the shop floor.
Every step, from pick creation to dispatch, is logged. You can see who picked, when it was picked, what was packed, and which carrier delivered it.
Automate Processes
Automation is a feature of just about every ERP implementation we have been involved in. Indeed, it is one of the principal benefits of implementing a system such as SAP. Examples include:
MRP
Delays in picking are often caused by a lack of stock on the shelves. MRP in SAP Business One overcomes this problem by ensuring that you always have the right level of stock in your warehouse. It draws on powerful analytical capability to improve the accuracy of forecasts. The solution then presents you with recommendations for purchase orders that should be raised against your preferred supplier and stock transfer requests to fill stock shortfalls at each location.
Automated Pack & Ship Workflows
SAP Business One automates document creation and the printing of shipping labels. Pack lists are generated automatically. Parcel delivery is tracked via real-time integration with courier systems.
Learn more
In the next blog in this series, we highlight problems caused by inaccurate demand forecasting.
To find out how SAP Business One from LAKE could help your business, download a copy of our SAP Business One Beginners Guide – Wholesale.
By Paul Barns